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Sensex jumps 174 points; L&T, Infosys help

Source : REUTERS
Last Updated: Thu, Oct 11, 2012 12:16 hrs
Sensex crosses 19,000 on hopes of further reforms

The BSE Sensex rose on Thursday as expectations of better-than-expected earnings sent Infosys and HDFC Bank higher a day before they report results.

The focus has shifted to July-September earnings, which come after the government's slew of economic and fiscal measures helped overcome worries about slowing growth and a continued threat of credit ratings downgrades.

India will unveil August factory data on Friday with a Reuters poll showing a modest 1.1 percent growth annually. Industrial ouput data, along with inflation numbers on Monday, will be key in setting expectations for the Reserve Bank of India meeting at the end of the month.

However, optimism is growing that India's growth slump is passing. A Reuters poll showed the economy will gradually recover over the next year, but the rate of expansion for this fiscal year will still be the weakest in a decade.

"Infosys results are expected to be good ... that will give a positive response to the market," said R.K. Gupta, managing director at Taurus Mutual Fund.

The market will closely watch corporate earnings and any announcements from the government, said Gupta.

The Sensex rose 0.93 percent, or 173.65 points, to end at 18,804.75 points.

The 50-share Nifty gained 0.99 percent, or 55.90 points, to end at 5,708.05 points, closing above the psychologically important 5,700 level.

Infosys is expected to post a 24.9 percent rise in profit in the quarter ended September 30 to 23.8 billion rupees.

Infosys gained 1.16 percent, while HDFC Bank rose 1.12 percent. Both are set to report their July-September earnings on Friday.

Fertiliser stocks, including Chambal Fertilisers and Chemicals Ltd , gained after the government raised the price of urea, the most-used nitrogenous fertiliser, by 50 rupees per tonne on Thursday.

However, traders said the hike was way below expectations, translating to less than 1 percent. Analyst said the hike would in no way support the margin improvement for fertiliser makers.

Rashtriya Chemicals & Fertilizers rose 4.43 percent, while Chambal Fertilisers and Chemicals Ltd gained 2.6 percent.

Unitech shares gained 17.24 percent after Norwegian telecoms group Telenor dissolved its joint venture with the Indian company, hoping to distance itself from a scandal over the award of operating licences and set out a new plan to win business in the subcontinent.

DLF Ltd shares gained 3.8 percent after falling 11.91 percent in the previous three sessions.

The country's biggest property developer was likely to suffer no material impact from accusations by anti-corruption activists of improper dealings, and the issue had been largely priced in to the stock, UBS said in a report.

However, Suzlon Energy Ltd fell 2.4 percent after bondholders rejected a four-month extension on redemption of more than $200 million in overseas convertible bonds due on Thursday.

Pharmaceutical stocks such as Cipla fell on expectations of a stricter drug pricing regime ahead of a cabinet meeting next week to finalise the new pharmaceutical pricing policy.

Cipla fell 1.9 percent while Lupin ended 3.1 percent lower.


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